Inquiry Leader Says Murdoch Papers Paid Off British Officials

The officer leading a police investigation into Rupert Murdoch’s British newspapers said on Monday that reporters and editors at The Sun tabloid had over the years paid hundreds of thousands of dollars for information not only to police officers but also to a “network of corrupted officials” in the military and the government.

The officer, Deputy Assistant Commissioner Sue Akers, said that e-mail records obtained by the police showed that there was a “culture at The Sun of illegal payments” that were authorized “at a very senior level within the newspaper” and involved “frequent and sometimes significant sums of money” paid to public officials in the Health Ministry and the prison service, among other agencies.

The testimony was a sharp new turn in a months-long judicial investigation of the behavior of Murdoch-owned and other newspapers, known as the Leveson inquiry. It detailed financial transactions that showed both the scale and the scope of alleged bribes, the covert nature of their payment and the seniority of newspaper executives accused of involvement.

The testimony may prove damaging to the News Corporation , the American-based parent of Mr. Murdoch’s media empire, if it gives ammunition to the F.B.I. and other agencies that are investigating the company for possible prosecution under the Foreign Corrupt Practices Act.

Until now, the Leveson inquiry delved primarily into questions of unlawful accessing of private voice mail and e-mail by tabloid journalists. That scandal that forced the company to shut down The News of the World, Mr. Murdoch’s flagship Sunday tabloid, in July 2011; it was replaced last weekend by a new Sunday versionof The Sun, which published its first issue hours before the latest hearings of the Leveson inquiry. In a statement, Mr. Murdoch, the head of News Corporation whose British subsidiary owns The Sun and other major newspapers here, did not specifically deny the allegations made by Ms. Akers. Rather, it focused on the company’s response: “As I’ve made very clear, we have vowed to do everything we can to get to the bottom of prior wrongdoings in order to set us on the right path for the future. That process is well underway. The practices Sue Akers described at the Leveson inquiry are ones of the past, and no longer exist at The Sun. We have already emerged a stronger company.”

In recent weeks, a number of senior journalists from The Sun have been arrestedon suspicion of making illegal payments to officials, and Ms. Akers said that the activities had been carried out by “the arrested journalists.”

Ms. Akers said that the payments from The Sun went far beyond the occasional lunch or dinner, with one public official receiving more than $125,000 over several years, and a single journalist being allocated more than $238,000 in cash to pay sources, including government officials.

It was clear from references in the e-mail messages — to staff members’ “risking losing their pension or job” and to the need for “tradecraft” like keeping the payments secret or making payments to friends or relatives of the officials — that the journalists in question knew that the payments were illegal, Ms. Akers said.

“Systems have been created to facilitate such payments whilst hiding the identity of the officials receiving the money,” she said. “The e-mails indicate that payments to ‘sources’ were openly referred to within The Sun, with the category of public official being identified, rather than the individual’s identity.”

She added: “Some of the initial e-mails reveal, upon further detailed investigation, multiple payments to individuals of thousands of pounds. There is also mention in some e-mails of public officials being placed on ‘retainers,’ and this is a line of inquiry currently being investigated.”

MURDOCH'S BOLD MOVE

None of the journalists have been formally charged. At first, they were suspended by The Sun pending the investigation. But in a bold move this month, Mr. Murdoch swept in to London, reinstated all of the suspended Sun employees and said that News International, the British newspaper branch of his company, News Corporation, would pay all of their legal bills.

He also announced the plans to publish the new Sunday newspaper to replace The News of the World, which was closed in July when it became clear that it had routinely and illegally hacked into the voicemail messages of celebrities, sports stars, politicians and crime victims as a way to obtain stories.

After the first edition of The Sun on Sunday, Mr. Murdoch declared in a message on Twitter that it had sold about 3 million copies.

The damaging revelations on Monday were not limited to The Sun, but extended to The News of the World.

According to a lawyer for the Leveson Inquiry, Rebekah Brooks, the former chief executive of News International, was told explicitly by the police in 2006 that at least 100 people, including politicians and sports stars, had had their phones hacked by a private investigator working for The News of the World.

Details of Ms. Brooks’s conversation with the police were revealed in an e-mail sent on Sept. 11, 2006, from a News International lawyer to the editor of The News of the World, Andy Coulson, the lawyer told the inquiry. According to the e-mail, Ms. Brooks was informed that police had evidence that the investigator, Glenn Mulcaire, appeared to have been paid more than $1.5 million by News International for his hacking work over a period of years.

The revelation is hugely significant because it speaks to one of the crucial questions in the hacking inquiry that has swept through Mr. Murdoch’s British tabloids: who knew what, and when. Until 2010, Ms. Brooks, Mr. Coulson, Tom Crone and a bevy of other News International officials repeatedly declared that phone hacking at The News of the World was limited to a single “rogue reporter” — the royal correspondent, Clive Goodman, who was jailed along with Mr. Mulcaire in 2007.

According to the e-mail, though, Ms. Brooks was told that the list of victims of Mr. Mulcaire’s hacking work included politicians, sports stars and celebrities — people Mr. Goodman would have had no reason to write about. And it said she was told that while police investigators had no direct recordings of News of the World employees hacking victim’s voicemails, they did have phone records showing that Mr. Mulcaire had had frequent “sequences of contacts” with The News of the World before and after accesses.

Speaking of the continuing police investigations, Ms. Akers said: “We are nearer the start than the finish on this inquiry and there remain a number of persons of interest. These include journalists and public officials.”

In connection with a separate inquiry into phone hacking by British journalists, the Welsh singer Charlotte Church announced on Monday that she had agreed to settle her lawsuit against News International, the British newspaper subsidiary of News Corporation, for a payment of about $950,000 — much more than the company paid in earlier settlements with targets of phone hacking. The case may be a sign that the litigation over phone hacking will cost the company more than some analysts have assumed.